When buying property in Spain, one of the first questions buyers ask is whether VAT applies. The answer depends entirely on whether the property is new or pre-owned, and on how the transaction is legally classified.
For most buyers purchasing a resale home, VAT does not apply. Instead, a different tax is payable. Understanding this distinction is essential for budgeting correctly and avoiding unpleasant surprises at completion.
This guide explains how property purchase taxes work in Spain in 2026, with a particular focus on pre-owned homes.
VAT (IVA): when it applies and when it doesn’t
VAT, or Impuesto sobre el Valor Añadido (IVA), applies to new residential properties in Spain when they are sold as a first transfer by a developer or promoter.
When VAT applies
VAT is usually payable when:
- You buy a new-build property
- The seller is a developer or promoter
- The sale is the first transfer of the property
For standard residential property, the VAT rate is 10% of the purchase price. This rate also applies to garages and storage rooms bought together with the home.
In addition to VAT, buyers of new-build properties normally also pay stamp duty (AJD), which is set by each autonomous community.
Reduced VAT rates
Some specific categories of subsidised housing (Viviendas de Protección Oficial) may qualify for a reduced VAT rate, subject to strict conditions. These cases should always be checked individually with a lawyer or tax adviser.
| Topic | VAT (IVA) | ITP (Property Transfer Tax) |
|---|---|---|
| Typical applies to | New-build homes sold as a first transfer by a developer/promoter | Resale (second-hand) homes (most purchases from private sellers) |
| Who pays it | Buyer | Buyer |
| Main rate (residential) | Usually 10% for standard new residential property | Varies by region. In Andalusia, the general rate is 7% |
| Extra tax often linked | Often also AJD (stamp duty) on new builds (rate depends on region) | AJD is not usually the standard tax on a simple resale purchase (the main tax is ITP) |
| Deadline | Paid/settled as part of completion mechanics (your lawyer confirms exact handling) | Normally within 30 business days from signing the deed (escritura) |
| Common exceptions | Complex cases exist. Confirm the legal nature of the transfer | Reduced rates can apply in specific cases. The taxable base can be checked against reference values |
| How to confirm | Use the AEAT Calificador de operaciones inmobiliarias and confirm with your lawyer | Same: AEAT tool plus legal confirmation |
Pre-owned (second-hand) properties: ITP instead of VAT
If you are buying a pre-owned or resale property, VAT generally does not apply. Instead, the buyer pays Property Transfer Tax, known as Impuesto de Transmisiones Patrimoniales (ITP).
This is the most common situation for buyers purchasing existing homes from private individuals.
Who pays ITP?
In a resale transaction, the buyer is responsible for paying ITP.
When is ITP due?
ITP must normally be filed and paid within 30 business days from the date the public deed of sale (escritura) is signed before a notary.
Missing this deadline can result in surcharges and interest.the property, which may be different from the market price. Your solicitor or tax advisor can help with this.
ITP rates in Andalusia (2026)
Each autonomous community in Spain sets its own ITP rates.
In Andalusia, the general ITP rate for most resale residential property purchases is 7% of the taxable value.
Reduced rates may apply in specific situations, for example:
- Certain young buyers
- Buyers with disabilities
- Purchases of lower-value properties meeting defined criteria
Eligibility for reduced rates is tightly regulated and must be confirmed before completion.
Special cases that need confirmation
Not all transactions fit neatly into “new build equals VAT” or “resale equals ITP”.
For example:
- Properties sold by banks
- Properties that were never occupied but are being resold
- Developer sales that are not legally considered a first transfer
In these situations, the applicable tax depends on the legal nature of the transaction, not just the age of the property or the identity of the seller.
How to check
The Spanish Tax Agency (AEAT) provides an official online tool called the Calificador de Operaciones Inmobiliarias, which helps determine whether a transaction is subject to VAT or ITP.
Even with this tool, buyers should always confirm the tax treatment with a qualified lawyer before signing.
How is the taxable value calculated?
ITP is not always calculated solely on the price stated in the deed.
Spanish tax authorities may compare the declared price against:
- Reference values published by the administration
- Cadastral data
- Market indicators
If the declared price is considered too low, the tax office may issue a supplementary assessment. This is another reason legal advice is strongly recommended.
Other purchase costs to budget for
In addition to VAT or ITP, buyers should plan for:
- Notary fees, based on the purchase price
- Land Registry fees, to register ownership
- Legal fees, especially important for foreign buyers
- Mortgage-related costs, if financing is used
- Valuation fees, required by banks before granting a mortgage
These costs are separate from VAT or ITP and apply regardless of which tax regime is used.
How to confirm which tax applies before you buy
Before committing to a purchase, buyers should:
- Confirm whether the property is a first or subsequent transfer
- Identify who the legal seller is (developer, bank, private individual)
- Check whether any exemptions or special regimes apply
- Obtain written confirmation from a lawyer on whether VAT or ITP applies
This step is especially important when buying from banks or in complex developments.
Why planning ahead matters
Understanding which tax applies affects:
- Your total purchase budget
- Funds required at completion
- Mortgage planning
- Future resale calculations
Assuming VAT or ITP incorrectly can leave buyers short of funds at a critical moment.
Final thoughts
For most buyers purchasing a pre-owned home in Spain, the tax payable is ITP, not VAT. VAT is mainly reserved for new-build properties sold for the first time by developers.
However, Spanish property taxation is highly technical, and exceptions exist. The safest approach is always to confirm the tax position before signing any contract or paying a deposit.
If you are buying property in Andalusia and want clarity on taxes, costs, and the buying process, professional advice at the right stage can save time, money, and stress later on.
